Jump to content
🌙 COLDPLAY ANNOUNCE MOON MUSIC OUT OCTOBER 4TH 🎵

Is this the end of free banking?


mc_squared

Recommended Posts

Is this the end of free banking? Britons face charges to use cash machines and write cheques

 

By Sean Poulter

Last updated at 12:19 AM on 12th November 2008

 

 

 

Britons face the introduction of charges to use cash machines and write cheques, it is claimed today.

Analysts Datamonitor claim it is only a matter of time before free banking, as British consumers know it, is abandoned.

The introduction of up-front charges for the right to have a current account is being speeded by a court case investigating the legality of punishing overdraft charges, it is claimed.

 

article-1084976-0515A07E0000044D-808_468x332.jpg Hidden costs: Datamonitor claim it is only a matter of time before free banking is abandoned in Britain

 

The Office of Fair Trading is locked in a battle with the big banks to try to get rid of penalty charges for breaching an overdraft limit or a bounced cheque.

If successful, the OFT case could see millions of bank customers given the right to reclaim billions of pounds in refunds from the banks for charges dating back six years.

Such a move would severely dent the finances of the high street banks at a time when they are trying to cope with huge losses from bad foreign investments.

Datamonitor believes the banks would try to shore up their finances by moving to a system of monthly charges - perhaps £5 to £20 a month - on current accounts.

As in the United States, the fee would guarantee a minimum level of service, such as a fixed number of cash machine withdrawals, cheques or direct debits per month.

The customer would then be faced with paying additional charges, taken from their account each month, for any additional cash withdrawals or debits.

Datamonitor analyst Rod Logan said: 'A charge per transaction for standard banking services could be one of the answers, as the banks will need to find other ways to reclaim the estimated £2.6billion they receive from overdraft fees and charges.

'In the current difficult market this is revenue that the banks can ill-afford to lose.'

The OFT however believes there is no financial justification for the blanket introduction of charges by the banks.

It says customers are already paying an average of £150 a year for their bank account through the fact they get little or no interest on money held in current accounts, plus other stealth charges.

Link to comment
Share on other sites

Free banking is a myth, businesses currently pay for personal account customers to have 'free' banking.

 

It says customers are already paying an average of £150 a year for their bank account through the fact they get little or no interest on money held in current accounts, plus other stealth charges.

 

Damn right, my interest rate has been cut from 10% to 8.5% this week :(

Link to comment
Share on other sites

Do you guys actually have free banking. We have never had it in aus as far as I remember

 

American banks don't have monthly charges as far as I know, just overdraft fees if you take more money out of your account than you have.

 

And David, the ATMs you're referring to aren't "free", hence why I didn't include them in my definition of free banking. ;)

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now


×
×
  • Create New...